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Lindahl prices solve the NIMBY problem

Author

Listed:
  • Jeremy Laurent-lucchetti

    (Department of Economics and Oeschger Center for Climate Change, University of Bern)

  • Justin Leroux

    (HEC Montréal)

Abstract

The siting of public facilities such as prisons or waste disposal facilities typically faces rejection by local populations (the "NIMBY" syndrome, for Not In My BackYard). These public goods exhibit a private bad aspect creating an asymmetry: all involved communities benefit from their existence, but only the host bears the local negative externality. We show that the well-known Lindahl pricing scheme constitutes the only cost-sharing method satisfying a set of properties specifically designed to handle the siting problem.

Suggested Citation

  • Jeremy Laurent-lucchetti & Justin Leroux, 2010. "Lindahl prices solve the NIMBY problem," Economics Bulletin, AccessEcon, vol. 30(3), pages 2457-2463.
    • Handle: RePEc:ebl:ecbull:eb-10-00469
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2010/Volume30/EB-10-V30-I3-P225.pdf
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    References listed on IDEAS

    as
    1. O'Sullivan Arthur, 1993. "Voluntary Auctions for Noxious Facilities: Incentives to Participate and the Efficiency of Siting Decisions," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 12-26, July.
    2. Meng-Hua Ye & Yezer, Anthony M. J., 1997. "Where will we put the garbage? Economic efficiency versus collective choice," Regional Science and Urban Economics, Elsevier, vol. 27(1), pages 47-65, February.
    3. Laurent-Lucchetti, Jérémy & Leroux, Justin, 2011. "Choosing and sharing," Games and Economic Behavior, Elsevier, vol. 73(1), pages 296-300, September.
    4. David Pérez-Castrillo & David Wettstein, 2002. "Choosing Wisely: A Multibidding Approach," American Economic Review, American Economic Association, vol. 92(5), pages 1577-1587, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Ferraz, Eduardo & Mantilla, César, 2020. "Lindahl vs. Lindahl: Optimal siting and sizing of a noxious facility," Working papers 65, Red Investigadores de Economía.
    2. Stefan Ambec & Yann Kervinio, 2016. "Cooperative decision-making for the provision of a locally undesirable facility," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(1), pages 119-155, January.
    3. Laurent-Lucchetti, Jérémy & Leroux, Justin, 2011. "Choosing and sharing," Games and Economic Behavior, Elsevier, vol. 73(1), pages 296-300, September.

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    More about this item

    Keywords

    Public Goods; Externalities; NIMBY; Location; Cost sharing.;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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